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United Parcel Service v. Lexington Insurance Group

United States District Court, Second Circuit

May 7, 2013

UNITED PARCEL SERVICE, Plaintiff,
v.
LEXINGTON INSURANCE GROUP, Defendant.

Stefanie A. Bashar, Esq., Stephen P. McLaughlin, Esq., Ansa Assuncao, LLP, White Plains, NY, for Plaintiff.

Ryan C. Chapoteau, Esq., J. Gregory Lahr, Esq., Sedgwick LLP, New York, NY, for Defendant.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

United Parcel Service, Inc. ("UPS") brings this diversity action against defendant Lexington Insurance Company ("Lexington") seeking a declaratory judgment pursuant to 28 U.S.C. ยง 2201 that Lexington is obligated to defend and indemnify UPS in an underlying personal injury action. Additionally, UPS seeks damages for Lexington's alleged breach of contract in failing to provide a defense. Lexington now moves to dismiss UPS's Complaint pursuant to Rule 12(c) of the Federal Rules of Civil Procedure or, alternatively, to stay the litigation and compel UPS to arbitrate its claims against Lexington pursuant to the binding arbitration provision in the Lexington insurance policy.[1] For the following reasons, Lexington's motion is denied.

II. BACKGROUND[2]

A. The Guard Services Agreement

On May 1, 2007, UPS entered into a Guard Services Agreement ("GSA") with Adelis.[3] The GSA provides that Adelis will furnish UPS with uniformed guards for locations and hours that are mutually agreed upon by UPS and Adelis.[4] The GSA requires Adelis to carry insurance coverage, including commercial general liability insurance, and provides that UPS shall be named as an additional insured on these policies.[5] The GSA also requires Adelis to indemnify UPS against all claims, losses, damages, expenses or liabilities which UPS may incur by reason of any act or omission by any employee of Adelis, or any injury suffered by any employee of Adelis, including personal injury, except when arising out of the sole negligence of UPS.[6]

B. The Policy

Pursuant to the terms of the GSA, Adelis obtained an insurance policy from Lexington (the "Policy").[7] The Policy includes an Additional Insured Endorsement, which states:

such person or organization is an additional insured only with respect to liability for bodily injury', property damage', professional liability', or personal and advertising injury' caused by [Adelis's] ongoing operations for the additional insured and only to the extent that such bodily injury', property damage', professional liability', or personal and advertising injury' is caused by [Adelis's] negligence or the negligence of those performing operations on [Adelis's] behalf.

The Policy also contains an arbitration clause, which provides, in relevant part, that:

in the event of a disagreement as to the interpretation of this policy, it is mutually agreed that such dispute shall be ...

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